VLAWMO Annual Financial Report 2009

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VADNAIS LAKE AREA WATER MANAGEMENT ORGANIZATION VADNAIS HEIGHTS, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2009 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED Restricted Assets Certain assets of the Organization are set aside for repayment of individual property owners once they meet specific criteria. Accounts Receivable Accounts receivable include amounts billed for services provided before year end. Special Assessments Special assessments represent storm sewer utility charges. These assessments are recorded as receivables upon certification to the County. Special assessments are recognized as revenue in the year they are collected or received in cash or within 60 days after year end. All governmental fund special assessments receivables are offset by a deferred revenue liability in the fund financial statements. Capital Assets Capital assets, which include property, plant and equipment, are reported in the applicable governmental activities cobimns in the government -wide financial statements. Capital assets are defined by the Organization as assets with an initial, individual cost of more than $5,000 (amount not rounded) and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets is included as part of the capitalized value of the assets constructed. Property, plant, and equipment of the Organization are depreciated using the straight-line method over the following estimated useful lives: Assets Useful Lives in Years Infrastructure 20 - 30 Compensated Absences It is the Organi7. tion's policy to permit employees to accumulate earned but unused vacation and sick benefits, which will be paid to the employee upon separation without the considerations of number of years of service. A liability for these amounts is reported in the governmental funds only if they have matured, for example, as a result of employee resignations and retirements. Fund Equity Designations of fund balance represent tentative mgpagement plans that are subject to change. -34-